Friday, September 26, 2008

Four Groups Submit Bids to Take Over Starrett City

Four groups submitted their final offers for the sprawling Starrett City housing complex on Jamaica Bay in Brooklyn on Thursday.

None of the groups would say how much they bid for the 5,881 apartments in 46 towers at Starrett City, the largest federally subsidized complex in the country.

But with the turmoil on Wall Street and in the credit markets, real estate executives who have been briefed on the offers said it was clear that the bids had gone down, not up, since the groups made initial offers of roughly $700 million to $850 million in July.

Among the final bidders were two groups that received letters from the federal Department of Housing and Urban Development earlier this week stating that it had concluded that they lacked “the financial and managerial capacity and the experience necessary to own and operate Starrett City.”

But the two groups — the NHP Foundation and the Allen A.M.E. Housing Corporation; disputed that assessment and submitted bids anyway.

“We think we’re very good at putting together a financial package that makes sense,” said Edwin Reed, chief executive of Allen A.M.E., adding that that “will enable us to maintain Starrett as affordable housing.”

The federal housing agency said that its assessments were preliminary and that it was up to the owners to decide whose bids they wanted to consider.

A group led by the Cogsville Group, which includes the Christian Cultural Center and the Clarett Group, also submitted a bid, as did a fourth group, which includes Westbrook Partners, the New York City Central Labor Council and the Metropolitan Council on Jewish Poverty.

The bidding for the property became more difficult this month when the Department of Housing and Urban Development decided to approve a smaller increase in the rent subsidies for the complex than the owners had anticipated.